BAGHDAD: Crude oil began flowing through a pipeline from the semi-autonomous Kurdistan region in northern Iraq to Turkey for the first time in two and a half years on Saturday.
The resumption started at 6 a.m. local time following an interim deal that broke a long-standing deadlock, according to Iraq’s oil ministry.
“Operations started at a rapid pace and with complete smoothness without recording any significant technical problems,“ the ministry stated.
Iraq’s oil minister told Kurdish broadcaster Rudaw on Friday that the agreement will allow 180,000 to 190,000 barrels per day of crude to flow to Turkey’s Ceyhan port.
The United States had pushed for a restart, which is expected to eventually bring up to 230,000 barrels per day of crude back to international markets.
Iraq’s delegate to the Organization of the Petroleum Exporting Countries, Mohammed al-Najjar, said his country can export more than its current quantity after the pipeline resumption.
“OPEC member states have the right to demand an increase in their (production) shares especially if they have projects that led to an increase in production capacity,“ he told state news agency INA.
Iraq, the group’s largest overproducer, was among states that submitted updated plans to OPEC in April to make further oil output cuts to compensate for pumping above agreed quotas.
Flows through the Kirkuk-Ceyhan pipeline were halted in March 2023 when an international court ordered Turkey to pay Iraq $1.5 billion in damages for unauthorised exports.
Turkish Energy Minister Alparslan Bayraktar also confirmed the resumption of oil exports to Turkey from Iraq in a social media post.
The preliminary plan calls for the Kurdistan regional government to commit to delivering at least 230,000 barrels per day to Iraq’s state oil marketer SOMO.
An independent trader will handle sales from the Turkish port of Ceyhan using SOMO’s official prices.
For each barrel sold, $16 is to be transferred to an escrow account and distributed proportionally to producers, with the rest going to SOMO.
Norway’s DNO said it had no immediate plans to export through the pipeline but that its local buyers could still ship its crude through it.
The company and its joint venture partner Genel Energy have said the issue of Kurdistan’s around $1 billion in arrears to producers needs to be addressed.
The eight oil companies that signed the deal and the Kurdistan regional government have agreed to meet within 30 days of exports resuming to work on settling the outstanding debts. – Reuters
